PEER COMPANIES

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PEER COMPANIES

MUMBAI: Stock markets hit a threemonth low on weak global cues and negative sentiment back home following a sharp fall in small- and mid-cap stocks which has spooked retail and high net worth investors (HNIs).

The Rail Budget, which raised freight charges by 4-5%, had a marginal impact. The Sensex slid 316.55 points, or 1.64%, to 19015.14 while the Nifty shed 93.4 points, or 1.6%, to close at 5761.35. Market breadth was negative with 2,072 stocks having declined against 774 advances on BSE. The rupee slipped 21 paise to close at 54.09.

Benchmark indices tracked peers in Asia like Straits Times, Hang Seng and Nikkei which shed 1-2.3% and Europe where FTSE, DAX and CAC traded down 1.3-2.3% on fears a hung parliament in Italy could impact the nation's reform process and reignite eurozone's broader debt crisis.

Top Nifty losers included Ranbaxy, Bajaj Auto and Hindalco, which fell 4.3-4.8%, while gainers included TCS, Infy and Bharti Airtel which rose between 1.3% and 1.75%.

Shares of mobile operators rallied on news that the government may be forced to reduce the base price for spectrum after poor response to its .`40,000-crore auction scheduled next month.

Bharti Airtel stock surged as much as 9% intraday, but settled 1.3% higher at Rs 311. Idea Cellular ended 3.69% up at Rs 118. Stocks such as Kalindee Rail Nirman, Kernex Microsystems, Titagarh Wagons and BEML fell between 3% and 15% on a disappointing Rail Budget, which, apart from marginally raising rates, did not announce any major expansion plans.

Small- and mid-cap shares remained under pressure on talk of financiers selling pledged shares belonging to speculators. "Domestic investors have been singed by the fall in midcap and small-cap stocks and this has added to the negative sentiment ahead of the Budget," said Yogesh Radke, head, quantitative research, Edelweiss Financial Services.

"A fractured verdict in Italy adds to concerns of the eurozone crisis gettingworse." This year's Budget coincides with the derivatives expiry, an event last seen 11 years ago, in 2002. After the global sell-off following the fractured election verdict in Italy, domestic investors are jittery ahead of Thursday's Budget. "Nifty March futures have seen a rise of 22% in open interest on Tuesday and if the Union Budget fails to pep up sentiment, Nifty could seen more down side,"said Radke.

According to Rikesh Parikh, VP-equities, Motilal Oswal Securities, "The market had been finding support near the 5820 level for the past 3-4 days, but today (Tuesday) it opened lower and saw selling which accelerated in the latter half of the day as the European markets opened negative. With events such as Budget and F&O expiry coinciding on Thursday, we expect volatility in market to persist."